Rewards programs or loyalty programs are a key part of marketing in the luxury hospitality industry. These programs are a way to drive engagement and increase customer lifetime value.
WealthEngine’s Senior Client Engagement Manager, Daniella Perlman is a sector expert. She shares her guidelines on how to drive loyalty among luxury hospitality guests.
Why are rewards program important for luxury hospitality brands?
Luxury guests are especially interested in connecting with your brand. They need to have a high degree of connection as they are living on your properties for a period of time. This means that your brand has to match their lifestyle and expectations.
To drive engagement in this segment, you need to offer rewards, special benefits, and exclusive experiences. Use personalization to find the right offer or experience for each customer. Personalized luxury programs are growing in popularity in the luxury hospitality industry. They are also becoming more refined in the way that they engage with guests.
For instance, Marriott has updated its rewards program to something called Marriott Bonvoy.
What is the Bonvoy Program? How is it different from other luxury hospitality industry programs?
Since its launch this past January, Bonvoy has taken over the luxury hospitality industry. It is a combination of Marriott Rewards, Starwood Preferred Guests (SPG) and Ritz-Carlton Rewards. Starwood was part of the merger with Marriott in 2016. The two luxury hospitality programs are now integrated.
Of course, this is big news for the industry and for luxury guests. Marriott Bonvoy has captured a large market share and is now the world’s largest hotel chain.
What can luxury hospitality consumers expect from this program?
Marriott was smart to leverage the strength of the SPG program. The SPG program, in particular, has a cult following in the luxury hospitality industry. It was popular among luxury as well as business travelers. Both segments enjoyed redeeming points for amazing experiences. For example, they could get free nights at hotels and resorts all over the world.
Further, the program features partnerships with luxury providers such as American Express. Luxury hospitality consumers can have their pick of luxury properties. For instance, they can stay at the Ritz-Carlton, JW Marriott, St. Regis, or the Luxury Collection. Guests can access all these from within the Bonvoy network.
What does this mean for the luxury hospitality industry? What can other large, luxury brands do?
Other luxury hospitality brands can take a different approach than the Bonvoy program. Marriott is capturing a large part of the market. Yet, the luxury hospitality industry is all about personalization and exclusive experiences. Luxury travelers are looking for rewards and experiences tailored to their needs.
Thus, while Marriott is casting a wide net in the luxury hospitality industry, other brands can do the opposite. This means you can find an exclusive niche that you can occupy in the industry. It also means that you can fulfill the exclusive needs of specific types of guests.
What factors should luxury hospitality brands consider while segmenting their customers?
It all begins with data analysis. Analyzing data helps you understand what makes your customers unique. WealthEngine’s WE Analyze can provide descriptive information about your contacts.
For example, you can see how many members of your rewards program own private jets or cars worth over $200,000. These are people who clearly enjoy luxury experiences. If you find that you have a large segment of members who are car enthusiasts, you can customize your offering to them. For instance, let’s say your property is near a NASCAR track. You can target promotions for this property to these members. Customer segmentation and analysis help you direct the right message towards the right consumer.
In this instance, you could also offer a private event for these members at the race track. This way you are offering them an experience that is hard for your competitors to replicate.
What other use cases help luxury hospitality brands set up meaningful programs?
Everything comes down to engagement. This is even more effective if it happens in real-time. Another use case is through WealthEngine’s API.
The API provides real-time data during online booking or even during check-in. For example, let’s say a non-member is checking in. Knowing their wealth profile, lifestyle preferences and interests immediately helps you make a personalized pitch to them.
When a luxury customer is checking in, you can offer them an upgrade to an executive suite right away. This sets the stage for actionable upsell opportunities.
A lot of times, when guests book a room online, you may offer bundling options. These could be as simple as breakfast or something like tickets to a nearby event. These bundles are usually offered without knowing the buyer well. Imagine how personalized and effective you can make them with data appended through the API integration.
The look-alike capabilities built into WealthEngine are useful to the luxury hospitality industry. For example, if you know which members have purchased high-end stays and experiences before, you can use this data to find new members for your loyalty program.
WealthEngine can build a persona based on common traits shared by these customers. These traits can include age, income, number of properties owned, etc. This persona can then guide you to find more people who look like your customers or members.
In fact, one of WealthEngine’s clients, a global hospitality brand has used this approach to find a lot of net-new customers.
How do you find your niche in the luxury hospitality industry?
Think about what is unique about your brand and your story. This then extends to what is unique about your offering and your location. You would use these factors to define a niche for yourself in the luxury hospitality industry. This is were driving an emotional connection with your guests comes in. Your guests will be loyal to you when your guests feel like you understand them, their needs, and interests.
For example, if your guests are wine connoisseurs, send over your sommelier when they dine at your property. Invite them to an exclusive wine-tasting, recommend a trip to a nearby winery. These are ways to drive that emotional connection.
WealthEngine’s data is derived from a vast array of sources. We can tell you which guests like wine, golf or NASCAR. These finer data-points can help with hyper-personalization.
How else can luxury hospitality programs set themselves apart?
Analyze trends in the luxury hospitality industry, analyze your member base. Match trends and interests to your existing offerings. You can also think about what causes they are interested in. If your organization supports these causes, make sure you let members know. This comes back to the emotional impact. It creates emotional connections and seals in brand loyalty.
For instance, if your organization gives to animal rights causes, make sure that your members who share a passion for this cause know about your initiatives. Similarly, if they are pet owners they could also feel a connection to your brand through your animal rights initiatives.
WealthEngine’s data scientists can help identify these interests and affinities among members. Creating wealth models around these data points can also help identify more customers.
Another such opportunity is leveraging galas that nonprofits might host at your properties. Working with the hosts, you can screen attendees to provide valuable insights.
You can help identify top prospects that the nonprofit should engage with at their event. Thus, the nonprofit can use their time effectively. For instance, WealthEngine provides actionable insights when you use services such as EventBrite to manage guestlists.
WealthEngine integrates with EventBrite through Zapier. This means that the hotel could screen attendees as they register to attend the event. These insights can benefit both you and the host organization. Both can leverage these insights to build relationships with influential guests. Further, providing insights as a value-add also strengthens your connection to the nonprofit.
These are all ways in which data enables personalization in the luxury hospitality industry. Personalization drives the emotional connection with guests. Further, the emotional connection drives loyalty. Loyalty reduces acquisition costs and increases lifetime value.
Find your luxury hospitality niche. Take a minute to fill the form on the right and a WealthEngine rep will contact you very soon.